The Real Property Tax Exemption Program for Agricultural Land is designed to identify productive farm land and farm buildings used in connection with farm production that may be eligible for exemption from real property tax in accordance with the Municipalities Act. It may apply to individuals who are productively using agricultural land, whether it is owned, leased or rented.
Program Objectives
- Encourage owners of idle land to put it into farm production.
- Provides some tax relief to farmers who have high assessments due to the relatively large amount of land that they require to operate effectively.
How the program operates
The amount of land that may be eligible for exemption is based on the gross sales of agricultural products. In general, the higher the level of production, the more acres may be exempt.
The exemption program is based on several assumptions. A significant portion of an individual’s land may consist of rock, bog, steep slopes, etc., and would not be capable of agricultural production. Furthermore, because productivity varies greatly from one type of enterprise to another, the exemption formula is calculated using a low value, based on extensive agricultural use.
Land eligibility under this program?
Qualification for eligibility under the Tax Exemption Program are:
- the land base must be used for the production of agricultural products;
- the land must be farmed by the individual applying for the exemption (in the case of rented land, however, the exemption will benefit the landlord);
- the applicant must produce a minimum of $5,000.00 in annual gross sales from agricultural products in the year prior to the exemption year. The exemption does not include residences or 0.5 acres of land on which residences are located.
Applicants who qualify will be eligible for exemption on one acre per $250.00 of gross sales beyond the $5,000.00 level. For example, if a farm has gross sales of $5,000.00, he would be eligible for exemption on 20 acres (i.e.: $5,000.00 @ $250 per acre= 20 acres). Similarly, a farm with gross sales of $50,000.00 would be eligible for exemption on 200 acres.
It is also appreciated that a farmer may, from time to time, have a poor year due to adverse climate, poor markets, etc. As a result, the program incorporates an income averaging system whereby a farmer may equalize the gross sales figure from a poor year by averaging it with the two immediately preceding years.
If a landowner does not qualify under the above conditions, but rents a minimum of 5 acres to multiple patrons for agricultural purposes (e.g. Garden plots, pasture), the rent received from the land may be used in place of gross agricultural sales.
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Greenhouse operations are eligible for exemption provided the applicant submits an affidavit declaring that his income is filed with Revenue Canada Taxation as a farmer.
New entrants and farmers expanding their land base
New entrants in agriculture and established farmers who have recently expanded their land base may also qualify for special consideration. Upon approval, farmers who are establishing or expanding may qualify for exemption on their total land base regardless of their gross sales. This would be in effect for a maximum of five ears from the time the land was acquired.
Application Review Process & How to Apply
Applications are reviewed by Planning Staff in consultation with Agriculture Development Officer to verify land ownership and level of production. Applications must be submitted each year.
- Tax exemption application forms may be obtained from: Town Council Offices; local area Agriculture Development Officer; or by contacting the Forestry and Agrifoods Agency, Land Resource Stewardship Division, P.O. Box 2006, Fortis Building, Corner Brook, Newfoundland and Labrador, A2H 6J8.
- Applications must be submitted annually. They shall be returned by November 30 of the year prior to tax year. Applications received after this date may jeopardize the exemption for that year.
- Farmers land base information from previous applications is kept on file. Applicants who have previously applied under this program are only required to indicate changes to their land base (i.e. Section II and / or Section IV: Only list properties which have been added or deleted).
- Rental properties must be identified and fully described on an annual basis (Section III).
- The completion of Section I and Section V is compulsory each year. Applications received without this information will be returned.
Contact
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